Cargill has acquired a beef processing facility for $14.1m from AFA Foods, which filed for Chapter 11 bankruptcy in the wake of a wave of media coverage over lean finely textured beef (LFTB) – aka ‘pink slime’.
Cargill said it intended to keep the 250 full-time jobs at the facility and make further investments to improve its competitiveness. Spokesperson for Cargill Michael Martin said in an emailed statement that the company would continue to produce the same products for its customers at the facility that were produced there under AFA Foods’ management.
“If they require FTB, it will come from another facility where we already produce it,” he said.
President of the Cargill Value Added Meats Food Service business Mary Thompson said: “This is a strategic acquisition that complements our existing beef production and distribution infrastructure and better positions us to meet our goals for both short-term and long-term profitable growth.”
Cargill said it has invested about $100m in its animal protein business in Texas over the past 15 months.
The north Fort Worth facility is just the latest AFA Foods plant to come under the hammer after the company’s Chapter 11 filing in April. Last month, AFA Foods was cleared to sell its Thomasville, Georgia facility to FPL Food LLC for $7.3m and its Los Angeles plant to Tri West Investments LLC for $4.4m.
AFA Foods listed assets of $219m and debt of $197m in its bankruptcy filing. It released a statement at that time clarifying that the bankruptcy filing was due to “recent changes in the market for its ground beef products and the impact of media coverage related to Boneless Lean Beef Trimmings (BLBT)”.
It said that bankruptcy was “the best way to preserve value for its stakeholders is through an orderly sale of some or all of its assets.”